A Post-Closing Trial Balance Should Be Prepared

question 20

Multiple Choice

A post-closing trial balance should be prepared

• A) before closing entries are posted to the ledger accounts.
• B) after closing entries are posted to the ledger accounts.
• C) before adjusting entries are posted to the ledger accounts.
• D) after adjusting entries are posted to the ledger accounts.

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Definitions:

Periodic Inventory System

An inventory system that updates inventory balance after a certain period, typically incorporating physical counts to determine cost of goods sold.

Cost of Goods Sold

Directly incurred costs for materials and labor necessary for the production of goods a business sells.

Cash Flow Considerations

Refers to an evaluation of how a company generates and uses cash in its business activities, including investments, operations, and financing.

Costing Methods

Various approaches used to calculate the cost of inventory and goods sold, such as First-In, First-Out (FIFO), Last-In, First-Out (LIFO), or average cost methods.